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“I am delighted by the significant progress we have already made with the transition process and the £400 million of capital synergies delivered. I look forward to explaining how Phoenix has been re-defined by this acquisition at today's Capital Markets Day," said group chief executive officer Clive Bannister.

"The trading update we have announced today demonstrates Phoenix's strength in delivering and ability to exceed our targets. We have delivered £1.3 billion of cash generation in 2017 and 2018, exceeding the upper end of our target range of £1.0 - £1.2 billion and have significantly strengthened our Solvency II surplus position during the year to a Group surplus of £3.1 billion as at 30 September 2018.

“We continue to deliver against our strategy with a further two bulk purchase annuity transactions completed in the second half of the year. Operationally, Diligenta will become our preferred outsource partner and enable us to deliver a single, digitally enhanced outsourcer platform to circa 5.5 million of our customers.

In the update, the company reported £664 million of cash generation in 2018 (2017: £653 million). The group has delivered £1.3 billion cash generation in 2017 and 2018, exceeding the upper end of its cash generation target of £1.0 billion - £1.2 billion for this period. The group has Solvency II surplus of £3.1 billion as at 30 September 2018 and a Shareholder Capital Coverage Ratio of 164% as at 30 September 2018.